Basic economics (refresher)

Question 1

theory
of the consumer

Answer 1

consumption (the demand for goods and services) by utility-maximizing individuals (i.e., individuals who make decisions that maximize the satisfaction received from present and future consumption)

Question 2

theory of the
firm

Answer 2

supply of goods and services by profit-maximizing firms. The
theory of the consumer and the theory of the firm are important because they help us understand the foundations of demand and supply

Question 3

get inverse demand function

Answer 3

insert variables, rearrange for P

Question 4

exogenous variables

Answer 4

Variables other than own price and quantity are determined outside of the demand and supply model of this particular market

Question 5

endogenous variables

Answer 5

Price, quantity

Question 6

equilibrium condition

Answer 6

quantity demanded = quantity supplied

Question 7

ascending price auction

Answer 7

auctioneer is selling a single item in a face-to-face arena where potential
buyers openly reveal their willingness to buy the good at prices that are called out by an auctioneer

Question 8

reservation prices

Answer 8

Ultimately bidders with different maximum amounts they are willing to pay for the item